Submitted by claimspro on
I recently had an interview where I didn't get an offer but I performed well and now the company wants to speak to me about other position from what I can tell was never advertised publicly or discussed in my first interview. I presently have a company car which was going to be provided as part of the position I first interviewed for. The second position, a company vehicle is not provided. Both jobs were manager postions. My question is if I get an offer how much value should I place on the company vehicle? I would also add the following on how I use my car now:
I have unlimited personal use
I don't pay an allowance to have it
I have a choice of vehicles every 2 years
Gas, repairs, etc are paid by the company via corp. credit card
Vehicle choice are mid size vehicle from Honda, Ford, and Toyota
I have another vehicle that my wife drives. So if I change jobs I would need to buy a car immediately.
What value would you place on the company vehicle and how would you come up with the number?
Do you have an offer?
If I understand your question correctly then you are inquiring about the relative "value" of having a company car as part of your compensation.
I think it is fine that you are starting to do homework, however, I would encourage investing more time in preparing for the interview. As the Manager Tools Interviewing Series states..."unless you got something...you got nothing."
I'll bet that you could put together your own estimate based on either (1) leasing costs--straight up or (2) purchase price amortized across how ohten you expect to replace the car plus gas an routine maintenance. Without knowing how many miles you are traveling there is no way to assemble an estimate for you.
It's not about what value *I* put on it...
Personally, I put very little value on a company car in my current role, because I commute to work on the train, during which time I can be effective and relaxed, and I practically never have a need for a second car on the weekends. Having a company car in which I had to commute to work would be a net loss to me. If I changed roles into something that needed a car for travel all day, then yeah, using my personal car for that would cost me a lot of money, and I'd like to have that value reflected in the remuneration -- either a company car, or a rather hefty chunk of cash onto my salary.
Now, presumably, my circumstances are not your circumstances, and you would put some value on a company car. It's a fairly straightforward calculation, really -- you work out what your effective carrying costs of the asset are (purchase price less sale price, over the period of ownership, plus any finance costs like interest, fees, whatever), the costs of owning and maintaining the vehicle (registration, insurance, servicing, tyres), and the costs of operating the vehicle (gas, tolls, etc). Take that on an annual basis, and that's the value of a fully-funded company car.
If you keep all these numbers split out in your spreadsheet, you can work out what the value to you would be for a partially-funded company car, if they want to meet you in the middle. Say they're willing to give you a car, but you've got to pay your own gas for personal use -- so the value of the car drops a bit, and you'd want to get that made up in salary in order not to lose out (don't forget to talk in post-tax dollars, too).
Disclaimer: I am not an accountant, nor do I play one on the Internet. This is not financial advice. Talk to a local tax-qualified accountant in your jurisdiction blah blah blah etc etc etc...
You own another car as
You own another car as well. It seems you should have an idea what providing one yourself, repairing it, etc will cost. Minus the value gained from actually owning it at the end of the paying off phase. That's how much value you should put on it. *shrugs*
As someone who used to have a company car, I understand where you're coming from. Unfortunately, I cannot give you an accurate answer since I lost mine more than 10 years ago. Later, my company phased them out entirely. I can tell you that my organization figured that a company car was worth about $6,000 then. (We bought Ford Taureses).
If you're in the US, the IRS is not going to allow you to count personal miles (from your home to your primary office) and my understanding is that you will be taxed on your personal use of a company car. So, if a car today is worth $8,500 (just a guess), you have to minus out your tax liability.
Frankly, I wouldn't pursue this. Just because one position has a car and another doesn't does not mean that they are identical in all other respects. For example, if you have a car you may be traveling more (I certainly did) than if you are in a position where there's not a lot of travel. The car then took on the aspects of a fringe benefit (road warrior pay).
I'd recommend focusing on the position, not the lack of car.
Your mileage may vary. (Yea, pun intended.)
One thing to keep in mind,
One thing to keep in mind, especially when just starting out, is that a company car is fixed "income" and to some extent "fixed" expense. I'd say the value depends on your view of money and automobiles. If you love cars or enjoy them symbolically, being provided a car is likely to save you money. Stipends are likely to cost you money as most will likely spend a bit more than the stipend, not be allowed to spend less, and/or upgrade more often than normal.
Think about your preferred car, look up terms online and add $40 per gas tank per year. I'd put it at $8k/yr plus or minus $3k unless you live over an hour away or wish you were driving a new jaguar. Personally, I'd prefer to get it in my salary and have the chance to grow it very year with raises...that and drive my old fully paid off car.
I have faced this situation a couple of times in my career. Here is how I look at the compensation value of a company vehicle.
AAA estimates that driving an average sedan in 2012 costs about $0.60 per mile, including all costs - depreciation, insurance, maintenance, fuel, etc. Most US drivers are in the range of 10,000-15,000 miles per year, so we're looking at $6,000-$9,000 (after tax dollars) as a starting figure.
Somewhere around $10,000 pretax is probably a reasonable estimate of what the current car is worth in compensation.